Ever wondered what the best model of employee ownership looks like?
Colin MacBeath, senior business development manager at Highlands and Islands Enterprise, went on a learning journey to Sheffield with Co-operative Development Scotland (CDS) to find out more.
Here he shares his experiences and three golden rules which help make for business success…
Sheffield in recent times is perhaps best known for being the hometown of golden girl and Olympic heroine Jessica Ennis. Perhaps less well known is the fact that it is something of a magnet for employee owned businesses. So I felt fortunate to find myself on a recent trip there hosted by Co-operative Development Scotland (CDS) on a learning journey to find out more about employee ownership.
One of my main aims for the trip was to discover the best employee ownership model, but it quickly became evident that no single model can be described as the ‘best’ model. People, history and circumstance bring a significant bearing to the model that is ultimately adopted. But what I did find were three golden rules which could help any business thinking about finding a winning formula:
- The help of an independent expert in the field to explore and present options can help ensure an appropriate and sustainable model is chosen
- Long term planning is required to allow owners to make a clean break when the time comes. This frees the employees to re-energise the business and set if off on a new growth path
- There is a clear drive for employee owners to behave in a way that protects or increases profits for their business
Hugh Facey from Gripple
For businesses where the exit route of preference for the owner is to shift power and decision making via employee ownership, it is important to understand why and how.The businesses we met talked us through their motivation triggers and willingness to relinquish power.
This continually needs to be refreshed or challenged along the way, as it can be difficult to walk away when you have been the major influencer behind a business.
When it comes to owner motivation, it is clear that there are many factors that come into play, from owners feeling protective of employees, such as Hugh Facey at Gripple, to identifying the most efficient way to get a fair and reasonable return for the shares held in a business.
Motivation for employees is also interesting, as once they are an owner in a business, there is increased importance placed on such things as avoiding waste and ensuring order deadlines are met. Employee ownership equals employee responsibility therefore.
One example from the journey was SUMA, a wholefoods wholesale business which from its very inception was structured as having equal ownership for all employees. This model needs everyone to bring something relevant to the table, and strikes a chord with collaborative working. Should a group of people, however large or small, be considering setting up a business together, or have a newly established business, an employee ownership model may be worth exploring.
Learning Journey attendees at SUMA, Sheffield
So what are my final thoughts and especially for the businesses that operate in the Highlands?
Employee ownership clearly can work for individual companies. There are four great examples currently operating in the Highlands at the moment:
- West Highland Free Press – UK’s first and only employee-owned newspaper based in Skye (video below)
- Aquascot – Highlands based sustainable seafood business (video below)
- Hebridean Jewellery – South Uist based jewellery manufacturers
- Highland Home Carers – Inverness based home care and support provider
(Learn more about the video in this link and read here for more from West Highland Free Press MD Paul Wood on how employee ownership could save the UK press.)
(Learn more about the video here and read more about Aquascot in this blog post.)
My trip to Sheffield has inspired me to want other businesses in the Highlands to also benefit from this model. I would encourage businesses interested in learning more to visit the CDS website. Or please feel free to contact me direct at colin.macbeath@hient.co.uk or 01463 234171.